Thursday 10 December 2020

Got My HDB Cake For Free?


Yesterday, I collected my keys to my enbloc replacement BTO flat from HDB.

Yup. Its like Aladdin of the Arabian Nights... Old lamp change new lamp. 

With new 99 year lease to boot! Sweet! (Fake American alert!) 

Which also means I am totally debt free now.

Time really flies when we are having fun! Let me re-introduce you to this post I wrote 9 years ago:

My Aim Is To Have My Cake And Eat It  

1.   Taking a 30 years loan does not mean I have to pay and pay bank interests until 30 years. 

I've repaid this housing loan 12 years early. 

Its does feel better to negotiate from a position of strength.

Rather this than to go to the bank with cap-in-hand to ask for an extension due to pay cut or retrenchment because of Wuhan virus circuit breaker... 

All because you wanted to have the shortest bank loan to save on the bank interests. Or so you thought. 

If only life would always go according to your plans (I hear god laughing in the background)... 

2.   Do you remember the missing dollar puzzle?

I got a case of it with my enbloc compensation...

a)   I paid $125K for my existing HDB resale flat. 

Except for a few extra thousands in cash for real estate agent commission and legal paper work and all that jazz, the initial deposit and subsequent bank repayments all came from CPF deductions.

b)   Got Singles grant of $11K, and enbloc grant of $15K from HDB. They were used to offset  my current resale and enbloc BTO replacement purchases.

c)   The enbloc compensation for my resale flat is $398K. I used it to purchase my enbloc replacement BTO for the same amount at $398K (That's the sacrifice for 3 room top floor with balcony). 

d)   HDB used my $398K compensation to first repay my outstanding bank loan (initial loan at $100K). Then repaid CPF for the withdrawals and accrued interests that I've used to pay this bank loan for the past 18 years. 

e)   I was pleasantly surprised when HDB told me I will get cash $102K??? 

Got advanced $35K cheque yesterday, while the balance will be given to me 4 months later when I surrender my existing 3 room resale flat back to HDB.

Eh? Nani?

Math is not my forte. 

I thought compensate $398K, buy $398K; no earn, no loss. That's that!

I mean CPF restored to as if I've never used it to buy property. All the accrued interests gotten back. 

So where did this extra $102K came from???

Initially, I thought its from the $11K and $15 grants, but that only explained $26K of the $102K...

For a moment, I thought I had my cake, and ate it:

i:   CPF restored as if I never used it all for housing.

ii:  Got a brand new fully paid HDB 3 room flat. 

iii: And got extra $102K out from thin air!?


Then I figured out. 

I'm dumb.

But lucky!



P.S.   I'll update my HDB 99 year lease journey when I age 65. There's a few options open to me:

*   Sell remaining lease back to HDB since I got no dependents (That's if I l still love the outstanding view and location after 12 years. Then again, I'm a man whore...)

*   Downgrade to 2 room but still located in Queenstown (I love Queenstown!)

*   Move to ulu new HDB estate but still stick with HDB 3 room (The new Tenah estate looks interesting. I need my gaming and trading room)

*   Move to ulu new HDB estate and downgrade to HDB 2 room for seniors with 35 years lease (Old oredi, can't game or trade anymore...)

No matter which option I choose, that would mean since age 35 onwards, I've lived "rent free" until I die. 

And I've got every cent back from the $125K I've paid for my current HDB 3 room flat to kick things off in the first place!!!

Who's afraid of 99 year lease again?

That is why I poked the young girl who "over analysed" when she did her exercise on whether to buy or rent.

When rent is lower than the monthly bank repayments of a 30 year bank loan, RENT!

When rent is higher than the monthly bank repayments of a 30 year bank loan, BUY!


  1. Wah seh. Looking forward to a shot of your balcony view! Can post next time?

    Hmm, curious as I'm not too familiar with the calculations. Has it to do with HDB "returning" to yourself how much you've used in total from CPF for your property and wiping out the HDB loan, then giving you back the net proceeds $66K in cash?

    But because this actually happens before the purchase of new BTO for $398K - ? So, if CPF has less than $398K to make this purchase, can take on another loan? LOL!


    1. Kevin,

      Will take some pictures ;)

      Bought $125K. Sold $398K.

      Knowing I made capital gains is enough ;)

      It goes to show using CPF for property has one BIG advantage over CPFIS:

      Can have capital gains profits out in CASH after repaying for CPF withdrawals and accrued interests :)

      Once upon a time, we can also withdraw our CPFIS profits OUT in CASH.

      I guess big daddy did not have their CPF voluntary contribution internet brigade ready at that time.

      So that CPFIS cash out loop hole was quickly plugged as part of moving goal posts...

    2. Kevin,

      I could have easily used $100K from my CPF to buy my resale flat at age 35. No need to take bank loan at all.

      But that would reduced my CPF funds for other investments.

      During these 18 years while my resale flat has been inflating in price, that $100K I've retained in CPF has not been sitting around just rotting with 2.5% interests ;)

      Bought and SOLD using CPFIS.

      I was away for 7 years without contributing to CPF after I bought my resale flat. And since my return at age 44, first 1.5 years no work, and then work part-time weekend with minimal CPF contributions.

      My tiny bank loan repayment of $500 per month was paid out from the investment gains from that $100K retained in CPF.

      You think why I have no interest in voluntarily putting money in CPF?

    3. Ahh thanks for sharing! Definitely pays to understand the system and how to make the most out of it when the opportunity comes. Will wait for your photo~

      In a way, I was thinking a little in the same way, but I'm not as aggressive or successful in investing the "rotting" cash in CPF-OA haha! Now when I can pay off my HDB loan in full, I still choose to keep it for the flexibility.

      Effectively paying 0.1% (2.6%-2.5% right) to do that? Since CPF-OA give bonus interest first $20k, actually is a better deal to hold on to my debt? Plot twist.

      It was prudence that made my wife and I max our loan period. Last time can have 30 years, now is 25 I think?

    4. Kevin,

      Its the good debt, bad debt thing.

      Technically I got a bank loan, but I sleep soundly knowing I can pay this loan off anytime, if I can't find any opportunities to deploy my funds.

      This gives me the added incentive to make sure I cut loss and do not hold on the unrealised losses using CPFIS.

      Rather than having airbags over the steering wheel, I believe people will drive more safely if we have a dagger sitting in front of the steering wheel ;)

      Yup, goal posts are always changing.

      CPFIS is good but still got lots of terms and conditions to "tie hand, tie leg".

      Cash in my pocket is much better!

      A long bank loan repayment period can also be a good hedge against big daddies of the world inflating away their debts with money printing.

      Two can play the game.

      The purchasing power I paid $500 monthly during my 1st year is worth a lot more than the $500 monthly I paying in 30 year's time ;)

  2. Hi Smol,

    Haha, let me guess .... you qualified for extra $40K grants & subsidies that knocked extra off the sticker price?

    Have fun doing the reno!

    And enjoy future balcony breakfasts while soaking in the sunrise!

    1. Spur,

      I wish!

      The only grants I got were the singles $11K and enbloc $15K. I don't qualify for the $40K and other grants. I don't think I want to risk jail time by falsely claiming hardship or I'm married!

      My $398K compensation, bought $398K should yield nothing extra if my CPF had been slowly depleted to pay off my bank loan.

      Who knew that tiny $100K invested with CPFIS (instead of paying in full for my HDB flat) had "grown" despite the monthly $500 drain to pay bank loan!?

      After refunding everything back to CPF, there's overflow cash surplus!?

      Its a nice affirmation that I'm one of those CPF members who made money using CPFIS ;)

      The HDB lady was surprised when I told her my HDB 3 room got balcony.
      I know. Most HBB balconies are found only in 4 or 5 room HDB flats ;)

      Can't wait to be fake "ang moh" by having meals semi al fresco at the balcony?


    2. Hoho! Reminds me of the parable of the talents. Congrats on managing big daddy's talents well! Takes 2 to reap the rewards 😉

      3-rm balconies seem to have started in the last year or so.

      It's quite a squeeze though, as the depth is rather short. Makes for excellent laundry drying though! 🤣

    3. Spur,

      Who am I kidding?

      Its still HDB heartland lifestyle after all...

      The balcony is definitely not condo or landed property sized where their balconies alone are bigger than my living room!


      HDB flats with balconies are today's equivalent to those legacy corner HDB flats - same same but different :)

      Hey, anything to stand out from "others"!

    4. It's still going to be "atas" 3-rm. ;)

      The high glass sliding doors will give a bright airy feel that conventional windows-only HDB cannot provide.

      And on high floor too ... windy city baby! No need aircon! (at least in living room)

      HDB architects try to blend aspirational with national resources. The focus on living space for raising families still take precedence, hence the short depth of HDB balconies (length is still OK).

      The day we see HDB planters, we know the design dept has gone bonkers. LOL!

    5. Spur,

      I was pleasantly surprised by the high ceiling of my new BTO :)

      The high glass sliding doors do make the tiny flat feels more spacious and brighter ;)

      The balcony I'll let mom have first dip - she'll probably use it for her plants. Hey! Its a HDB planter after all! LOL!

      Well, there goes my naughty idea of putting wooden slats on the balcony and using it as a "deck chair" to sun tan in the nude all the way up in the clouds!

  3. Enjoy your castle.

    Hope you find a Queen befitting the castle too :)

    1. hyom,


      Don't hold your breath about the Queen thing...

      Happily a man of leisure. (No nagging!)


  4. Congrats 🎊🎊

    I jealous. I dun think I have the enbloc luck. I just hope I have BTO luck.

    So far, my BTO no luck... Sigh....

    1. Sillyinvestor,


      Best wishes to your BTO balloting!!!

  5. Congratulations SMOL!

    Who says 'big daddy' does not take care of us!?

    We forwent our bite of the HDB cherry by going straight into private property for our first property. But no regrets, that decision went well. That route also exposed us to things that we would otherwise not be aware or ever experienced. Things like managing your own estate, being the MC chairman, secretary, treasurer, liaising with government agencies on building maintenance compliances AND rallying your neighbours for enbloc sale.

    Now that we are climbing down the mountain, maybe just maybe, we might get a taste of staying in a HDB (by living with our children when they get their own flats) and rent our properties for our retirement income. ;-)

    By the way, enjoy your new home! Early Christmas Present!

    1. mysecretinvestment,

      Thank you! Still got 4 months to renovate and move in ;)

      I would love to leapfrogged into private property for my first home - so would everyone else seeking FIRE!!!

      The 2 bites of the cherry are for those with lesser means straight out of the gate ;)

      Like my geography teacher encouraged me, "Jared, if others take 10 minutes to understand, but you need 7 hours to understand, so be it.

      Once you have understood, there's no difference anymore."

      Similarly, whether we bought private as our first home, or need 10 bites of the cherry to afford one, once got private property, there's no difference :)

      Even though I'm HDB heartlander, I'm not one of those that proudly declare they don't count property as part of their net worth, or swear REITS are better than physical properties...

      Dead giveaway they are HDB heartlanders with holes in their hearts. Can't afford private properties say so lah!

      I've stayed at condo with full facilities in Shanghai, and landed property (just one small room) with pool in Athens. I've gotten it out of my system ;)

      I better say something nice to my HDB brethren before they kick me!

      Oh! HDB heartlanders can buy private property for investment or rental income.

      Private property owners can buy HDB but must sell their private property within 6 months after getting their HDB flats.

      There you go! Happy now?


  6. Congratulations! Life is always best if we fall on lucky side of the Game. Wrong side is likely end up kpkb MIW and joining Oppo in their loud voices to narrow the inequality gaps. Not bad. You tio HDB Lottery!

    1. CW,

      Thank you!

      Yes, its better to be lucky than smart!

      Age 55 get more money out by opting for BRS.

      Then age 65 get more out depending either sell lease back to HDB or downgrade to 2 room.

      I've got my HDB flat for "free".

      Its like out stocks doubled, we sell 50%. Got our cash capital back, while the remaining shares are now "free"!!!

      We are pretty much sailing in the same direction. Except I more aggressive ;)

      You take CPF interests out; I take CAPITAL and interests out!

      You and mysecretinvestment are more "Tarzan" than me. Without doing anything, your CPF is already a minority part of your net worth.

      Me? To make my CPF a smaller part of my net worth, I have to literally take money out!!!

      SMOL indeed!

      SMOL is the cute way to spell small, tiny, nano ;)

  7. Replies
    1. Unintelligent Nerd.

      Fa Cai! Fa Cai!

      All the best to your crypto adventures!

  8. may I know which replacement site did you choose

    1. Happy,

      I chose site C.

      I know the area well. Its the location of the former Hua Yi Secondary School. My former Hua Yi Primary School is just next to it ;)

      Across the road are the landed bungalows. Cannot afford landed so live as close as possible to them to enjoy the halo effect?


    2. Nice. Mine is site A. Still long

    3. Happy,

      Ah! You chose the most popular former 大众 site ;)

      Both sites A and B still unfinished. Probably mid next year.

      Sites D & E the fastest to be finished. Got people moved in already!

  9. may I know why did you choose to use CPFIS proceeds instead of hdb compensation to pay

    1. Happy,

      I never do anything.

      That's the beauty of enbloc. If anyone has to fork out out of pocket cash, no one will welcome enbloc lottery!

      I used the $398K compensation to offset the $398K replacement.

      No harm; no foul. No earn; no loss.

      That's where I made the mental mistake. Hello, how can no earn? I bought my resale flat for $125K remember?

      As for the CPFIS part, instead of not taking a loan at age 35 and paying my resale flat in full (save on bank interests), I took a bank loan, and used the $100K in CPFIS to trade unit trusts (I focus on Earn More) - buy, sell; buy, sell (that time ETFs not popular yet).

      I knew I made money in CPFIS, but as I also use the profits to pay down my bank loan over the past 18 years, it was still a pleasant surprise to find that its still so much above $100K!?

      Its like I've never used CPF to buy my flat!? And its much MORE than had I left it rotting just collecting the CPF interests.

      That's the original intention of CPFIS - for members to grow our CPF funds through EARN MORE ;)

      Evidently, big daddy didn't think CPF interests ALONE was enough at that time. Or?

      Its normal. When facts change, its expected big daddy will flip-flop.

      Best intentions only!

  10. Hi SMOL,

    Long time no see :) Glad that things turn out well in one of the biggest financial decision in singapore - housing. You settle that one, almost as good as tio toto :)

    Things are great for me - busy with life, not so much into blogging now (there's only 1 self-censored post, so it's not a matter of writer's block, it's that the writer is gone lol).

    Take care man, till we meet again :)

    1. LP,

      Thanks! I'm lucky, lucky!

      That's one hell of a radio silence from you!!!

      Glad things are going great for you too :)

      Hey, different phases of our lives.

      You must be learning so many new things about yourself, being a virgin dad and all...

      Send my regards to "little dragon girl". I can imagine being a mom will not change her one bit. Bet she is still kicking asses!


  11. Hi SMOL,

    Ugh... you are talking about my this post again haha - =.=

    Ok, ok your method more simple. No need think so much!

    Just curious, let's say if your flat didn't 'strike lottery' and got enbloc, how many years lease would it be left with now?

    1. Rainbow girl,

      The lease of my current Tanglin Halt flat starts from 1971.

      That meant if we count this year onwards, I can stay for another 50 years until big daddy took back my flat in 2070.

      I am 53 years young this year. More than enough unless I live beyond 100!!!

      Even if I let my flat expire worthless after 99 years, another way of looking at it is since age 35, I only have to pay $500 rent per month for 30 years until my bank loan is fully paid at age 65.

      Where to find a place where the rent does not increase for 30 years!?

      $500 per month for a whole HDB 3 room flat!

      Then from age 66 onwards, I would be staying RENT FREE until I die!

      Keep it simple.

      P.S. That's from a single with no dependents perspective. Its all ME, ME, ME.

      Married with children, you'll have to ask someone else ;)

      I just know if the children are eying the parents' HDB flat, then life has not been too kind, financially, to the grown-up children...

  12. Looks like you have found a great place. Is good to feel appreciative of what we have. Life is that simple. Congratulation.

    1. Thanks Cory!

      I have a "my glass is half-full" outlook on life.

      Agree. Its that simple ;)


Related Posts Plugin for WordPress, Blogger...